Latam Ministers Call For Finance Tools To Protect Against Climate Disasters  

 

• Finance ministers across Latin America and the Caribbean called on the Inter-American Development Bank (IDB) to look at new finance tools to mitigate the economic shock of climate disasters.
• Ministers also urged the IDB to continue backing projects that protect the environment, with the regional lender having historically invested nearly $10Bn in this area. "We need products with incentives," Uruguay's finance minister Azucena Arbeleche said further noting that "An underdeveloped country is not going to indebt itself to pursue this path when it has short-term emergencies."
• Jamaican finance minister Nigel Clarke called for "risk transfer instruments" that would allow Caribbean countries to protect fiscal sustainability, even after natural disasters. Among the hardest hit by rising temperatures, Caribbean nations are preparing to seek compensation at the COP27 climate talks, as climate change inflicts increasingly devastating blows to its tourism industry.
• Though Latin America and the Caribbean are relatively minor contributors to greenhouse gas emissions, the IDB estimates that rising temperatures, sea levels and changing rainfall patterns will in 30 years cost the region some 2%-4% of annual GDP.
• Ministers also discussed initiatives their countries were taking to combat economic turmoil and climate disasters. Uruguay's finance minister Arbeleche stated that the government was preparing to issue a sovereign bond with interest rates linked to environmental actions. Colombia's financial minister Jose Antonio Ocampo indicated that the sovereign was looking at developing alternative exports and growing the country's eco-tourism sector to diversify from oil income.

(Source: Reuters)